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- Stillwater Designs is a private company and outsources production of its Kicker speaker lines. Suppose that Stillwater Designs provided you the following transactions: a. Sold a warehouse for 750,000. b. Reported a profit of 100,000. c. Retired long-term bonds. d. Paid cash dividends of 350,000. e. Obtained a mortgage for a new building from a local bank. f. Purchased a new robotic system. g. Issued a long-term note payable. h. Purchased a 40% interest in a company. i. Reported a loss for the year. j. Negotiated a long-term loan. Required: Classify each of these transactions as an operating activity, an investing activity, or a financing activity. Also, indicate whether the activity is a source of cash or a use of cash.Garcia Co. owns equipment that costs $150,000, with accumulated depreciation of $65,000. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $90,000 cash B. $85,000 cash C. $80,000 cashCapstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an agreement to sell the land for $375,000. In accordance with the sales agreenwnt, the buyer transferred $375,000 to Capstone’s bank account on February 20. How would elements of the accounting equation be affected by the sale?
- Garcia Co. owns equipment that costs $78,300, with accumulated depreciation of $40,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $47,000 cash B. $37,500 cash C. $30,000 cash If an amount box does not require an entry, leave it blank. A. fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 B. fill in the blank 14 fill in the blank 15 fill in the blank 17 fill in the blank 18 fill in the blank 20 fill in the blank 21 C. fill in the blank 23 fill in the blank 24 fill in the blank 26 fill in the blank 27 fill in the blank 29 fill in the blank 30 fill in the blank 32 fill in the blank 33Garcia Co. owns equipment that costs $78,300, with accumulated depreciation of $42,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $47,000 cash B. $35,500 cash C. $27,000 cash If an amount box does not require an entry, leave it blank.Southern motors (seller) agreed to sell to Mr. Bean (Buyer) a specific dump truck for 1,500,000.00 for delivery cash on delivery and the payment of the price to be made on October 15 but Mr. Bean failed to pay the price. What are the remedies of southern motors?
- Talbot purchases business machinery for a price of $100,000. Talbot pays the seller $20,000 in cash and finances the rest by giving the seller a note for $80,000. What is Talbot’s initial basis in this machinery? Refer to the facts of Question #1. Assume Talbot uses the machinery, depreciates $60,000 of the machinery’s cost, and sells the machinery for $50,000 after that time period. Talbot reduced the principal amount of the note to $40,000 during the period of use. The buyer assumes the balance of the note and gives Talbot $10,000 in cash to complete the sale. What is Talbot’s gain on the sale of this machinery?The owner of a small furniture manufacturer is retiring and is interested in selling the business to her fifteen employees. The firm owns all its building and equipment and has inventory of wood, finished products it values at $50,000, and an existing mortgage loan with a $100,000 balance. The owner is asking $1,000,000 for the business and all its assets. Assuming the employees do not simply have $1M cash on hand, identify and explain which source(s) of financing would support the transaction?Kim Morris purchased Print Shop, Inc., a printing business, from Chris Stanley. Morris made a cash down payment and agreed to make annual payments equal to 40 percent of the company’s net income in each of the next three years. (Such “earn-outs” are a common means of financing the purchase of a small business.) Stanley was disappointed, however, when Morris reported a first year’s net income far below Stanley’s expectations. The agreement between Morris and Stanley did not state precisely how “net income” was to be measured. Neither Morris nor Stanley was familiar with accounting concepts. Their agreement stated only that the net income of the corporation should be measured in a “fair and reasonable manner.” In measuring net income, Morris applied the following policies: 1. Revenue was recognized when cash was received from customers. Most customers paid in cash, but a few were allowed 30-day credit terms. 2. Expenditures for ink and paper, which are purchased weekly, were charged…
- Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $220,000. The Focus Company initially offered to buy the land for $177,000. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $232,000. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $93,928. The Focus Company initially offered to buy the land for $111,791. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $102,540. Under the cost principle, at what amount should the land be recorded in the accounting records of Focus Company? a.$212,000 b.$111,791 c.$102,540 d.$93,928Talbot purchases business machinery for a price of $100,000. Talbot pays the seller $20,000 in cash and finances the rest by giving the seller a note for $80,000. What is Talbot’s initial basis in this machinery?